Comparative Balance Sheet

A comparative balance sheet compares an entity’s assets, shares, and liabilities. In this sheet, all the details of the entity are written side by side to make a clear visual comparison. Many companies create a comparative sheet at the end of every month. This sheet is useful for creating the balance sheet to report the entire financial year of the company.

The balance sheet keeps records of an entity’s assets, liabilities, and shareholders. It can represent the financial statement at the end of the year, keeping records of business finances for the past three years. It can also represent the balance sheet at the end of each month, holding records of the finances of the last twelve months.

In other words, the main purpose of the comparative balance sheet is to represent the company’s financial condition over time to the customer. This is very useful in developing trend line analyses.

The main purpose of using this balance sheet is to reveal the number of assets the companies gained in the previous year. It also tells about the assets of the companies where they made a big investment.

The balance sheet is also used to compare the balance sheet of the current month with that of previous months. The investor can see the company’s financial position over a particular period of time. Although the financial statements can also be used to conduct trend line analyses, the comparison balance sheet does the best job.

Privately held companies are not required to use the comparative balance sheet. The sheet is not required to be held by private companies or nonprofit organizations, but the SEC needs it for the reports generated by public companies in various circumstances.

Basic objective?

The comparative balance sheet’s basic objective is to determine the differences between two or more similar quantities. The main aim is to determine the company’s financial health. The investor can decide if the company has expanded its assets over a specific period of time. The company’s recent investment in any field can also be evaluated using the balance sheet.

Most companies hire a professional to create and use a comparative balance sheet. However, you can also do it yourself by downloading a readymade and downloadable template. The template is very easy to use and customize, which makes it highly usable and effective.

The template is handy for businesses, organizations, and companies. A company just needs to change its name and some other records. It can be integrated easily into any company. It is very commonly used these days.

The comparative balance sheet is usually prepared in MS Excel file. There are a series of rows and columns in this sheet. Each column can be used to enter one factor to be compared. If you want to compare 4 factors, 4 columns can be drawn in the comparative sheet.

File: (.xlsx) FREE Download

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